London’s Economy

I am pleased to have secured this important and timely debate on London’s contribution to the UK economy. The number of unsolicited but helpful briefings that I have received emphasise the importance of the debate. There is not time to do them all justice, but I am grateful to everyone who wrote to me from a wide variety of organisations that I did not even know existed. That shows how topical the subject is. In many respects, London is the great success story of the past few years. Its strengths are that it is a diverse, vibrant, open and outward-looking city. Hon. Members may have seen the prominent story in The Times last Tuesday which suggested that London is overtaking New York as a financial centre and is overtaking Paris as a cultural centre. That was not the first straw in the wind to that effect. London’s business and financial services, creative industries, retailing and tourism are all growing. World-class businesses have gathered in London to contribute to our high-growth economy. Forty per cent. of the UK’s export growth in 2000-04 came from London, mainly from the financial sector. What benefits London also benefits the rest of Britain. Some estimates have placed London’s annual net tax exports to the rest of the country at £8 billion at the bottom of the range and other estimates are as high as £20 billion or more. The capital accounts for 15 per cent. of total UK employment and 18 per cent. of its gross domestic product, with productivity 27 per cent. higher than in the country as a whole. London produces far more in tax than it ever receives in state funding, benefits and services.